I’m going to show my age. One of the subjects that comes up when we talk about the differences in food and drinking habits ‘back in the day’, is that when I first went to restaurants as a teenager with my parents, on the ‘starters’ menu alongside paté and the newly invented prawn cocktail was orange juice. And the serving was generally small.
So when we saw our own teenage children downing orange juice in vast quantities, we’ve often remarked “that was a luxury in our day”. It seems that orange juice’s luxury status may soon return, as its price has rocketed.
It seems certain that fruit juice prices will rise sharply during the year. A succession of poor harvests due to extreme weather in Florida and China, coupled with increased demand from Asian countries, has forced up the global commodity market price of orange and apple juice.
Experts are predicting that factory prices could rise by as much as 80% for orange juice and 60% for apple juice during 2011. A recent report, by Julia Glotz, in UK industry trade magazine The Grocer, said that prices are set to climb even higher, making most juices a luxury.
Cartons of juice in UK supermarkets have already begun to rise sharply, and may soon leave many family’s weekly shopping list except on special occasions.
Over the past year, the price of a 1 litre carton of Tropicana fresh orange juice across the five major supermarket chains rose 22%, from an average of £1.80 to an average of £2.19, while a 1 litre carton of own label from concentrate apple juice went up an average of 21%, from 87p a year ago to £1.05.
Fruit juices are just the latest household staple to be hit by the massive rise in global commodity prices, which has affected everything from fuel to bread. The UK Office for National Statistics recently calculated that inflation, based on the Consumer Prices Index, increased from 3.3% in November to 3.7% in December, with food prices driving much of this jump – increasing in price by 6.1%.
Richard Hall, chairman of food consultancy Zenith International, said orange and apple juice producers were already the world’s largest, most efficient juice producers, so there was little room for them to absorb cost increases. “Pricing for orange and apple juice this year could see the most radical change,” he said.
Orange juice futures and pack sizes
In January orange juice futures hit a three year high after a 4.6% jump. According to AccuWeather.com expert senior meteorologist Dale Mohler: “While the price is stable currently, prices could increase in the near future. It has been drier than normal all winter and that is not expected to change even through the spring,” Mohler said. This could trigger a further rise in prices in a month or two.
In the United States, PepsiCo’s Tropicana has responded by packaging orange juice in smaller cartons, reduced them by 7.8% from 64oz to 59oz. When faced with a choice between raising the price or downsizing the product, Tropicana made the decision based on consumer research to reduce the pack size. People would rather pay the same price and receive less juice.
If the trend continues, and few think that it will not, then consuming 5-a-day may become a luxury for those on a budget – and often those are the very people who already face the toughest health choices for their families.
Source: The Telegraph, The Grocer, Zenith International, AccuWeather.com
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